UBS Group AG is reportedly engaged in discussions to acquire some or all of Credit Suisse Group AG, possibly with government support, in a bid to rebuild confidence in the banking industry, according to individuals familiar with the matter.

Credit Suisse recently received a liquidity injection of over $50 billion from the Swiss National Bank, which failed to prevent further decline in its shares or stem the outflow of deposits, prompting the central bank and top financial regulator to facilitate talks with UBS, its larger counterpart.

If UBS acquires parts or all of Credit Suisse, it would result in a major consolidation in the Swiss banking industry. The move is likely aimed at restoring confidence in the sector, which has been shaken by recent events at Credit Suisse. However, the potential involvement of government support also suggests ongoing concerns about the stability of the country's banking system.

Credit Suisse stock has taken a beating over the long term and especially in the recent past, with shares near $2. It’s possible that overall banking instability in Europe can affect U.S. stocks as well.

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